Rhabdomyosarcoma (RMS), tumor or skeletal muscle, is the most common pediatric soft tissue cancer. RMS development has no known association with environmental factors, thus the key to understanding RMS must come from studying pathogenic changes that are unique to RMS. This application focuses on alveolar RMS (aRMS), the most aggressive RMS form with the highest tumor recurrence and mortality rate. ARMS carries a t2;13 chromosomal translocation that creates a chimeric protein that combines the DNA binding domain of a muscle regulatory factor Pax3 and the activation domain of a ubiquitously expressed FKHR. PAX3-FKHR is a potent transcription factor that causes muscle cells to lose both cell cycle and cell differentiation controls. Obliterating PAX3-FKHR from aRMS cells leads to cell death. These observations support PAX3-FKHR as a critical pathogen in the initiation and progression of aRMS development. Yet, the molecular basis of PAX3-FKHR mediated oncogenesis remains elusive. Data obtained from previous funding periods provided major clues for unveiling the oncogenic basis of the fusion protein. PAX3-FKHR gains novel mechanisms to alter expression of genes that are not normally regulated by the parent proteins. Moreover, the PAX3-FKHR oncogenic effect depends critically on these gains in transcription specificity. We hypothesize that molecular pathways specifically disrupted by PAX3-FKHR represent the most critical events involved in aRMS development. The objective of this grant is to investigate PAX3-FKHR-specific regulatory mechanisms that contribute to the proliferation and differentiation defects in muscle cells. Three specific aims are proposed: Aim 1 is designed to identify and characterize the functional role of genes whose expression is directly targeted by PAX3-FKHR independent of Pax3 and FKHR. This study will define early events in muscle cell transformation by PAX3-FKHR. Aim 2 is designed to define the molecular steps involved in G1 cell cycle defect by PAX3-FKHR, with a specific focus on E2F1-Skp2-p27kip1 regulatory axis. Aim 3 focuses on delineate the molecular events responsible for blockage in muscle differentiation by PAX3-FKHR, with an emphasis on the dysregulated Myogenin/MEF2C activity in promoting muscle specific genes such as Myf6. Studies outlined in Aims 2 and 3 will provide a molecular basis for the uncontrolled growth and differentiation phenotypes in aRMS cells. Results of the proposed studies will fill in the entire pathway in aRMS development, from t2;13 mediated creation of PAX3-FHR to aberrant activation of downstream targets to transformation pathways. Elucidating the basis of tumor-specific activation/inactivation pathways will provide important determinants in patient diagnosis or prognosis and in novel therapeutic design that specifically interrupt tumor function without damaging normal cell function.